Vodafone Idea Ltd has decided to close m-pesa vertical following the closure of Aditya Birla Idea Payments Bank Ltd (ABIPBL), with which it was being merged. Nearly 17 months after it began operations, ABIPBL on July 20 announced winding up of its business. Vodafone Idea wrote off Rs 210 crore in the June quarter on account of decision to close its payments bank business. Vodafone m-pesa was one of the 11 firms that were given payments bank licence by the RBI in 2015.
Vodafone Idea’s net loss narrowed to Rs 4,873.9 crore for the April-June quarter, helped by a change in accounting standard and lower operating costs, but revenue dropped 4.3%, as some subscribers left and others moved to lower tariff plans. The adoption the Ind AS 116 accounting standard resulted in a positive impact of Rs. 1.2 billion at PAT (profit after tax) for the quarter. Ind-AS 116 enables companies to recognise leases (towers in this case) as assets in the balance sheet from April 1, 2019, and as such, the relevant lease rentals do not get reflected in the network opex.
Within three years of starting its commercial operations, Reliance Jio has become the country's largest telecom operator with a subscriber base of 331.3 million, surpassing Vodafone Idea which on Friday reported a decline in its user base to 320 million by June 2019. In May this year, Mukesh Ambani-led firm Reliance Jio had pipped Bharti Airtel to become the second largest mobile operator with 322.9 million users and 27.80% market. Airtel had 320.38 users or 27.6% market share.
Vodafone Idea Ltd. has hired Bank of America Corp. and Morgan Stanley to help sell its fiber assets as India’s largest mobile carrier by users seeks to raise funds to pare debt. The bankers will initiate discussions with potential buyers for the fiber assets, which could be valued at as much as Rs 13,000 crores ($1.9 billion). Vodafone Idea, which was formed by the merger of Vodafone Group Plc’s Indian unit with Kumar Mangalam Birla’s Idea Cellular Ltd., has reported losses in every quarter since the deal was announced in 2017.